Token Management: Maximizing AI Efficiency

Token Management: Maximizing AI Efficiency

Understanding and optimizing token usage is crucial for efficient AI-assisted development. This guide covers advanced strategies for managing tokens, reducing costs, and maximizing the value of every AI interaction.

Understanding Token Economics

Token Basics

What is a Token?

Roughly 4 characters of text. “Hello, world!” ≈ 3 tokens

Context Window

Maximum tokens per request (8K to 1M+ depending on model)

Pricing Structure

Charged per 1K tokens for both input and output

Token Limits

Rate limits and monthly quotas vary by plan

Token Calculation

// Token estimation utilities
class TokenCalculator {
  // Rough estimation: 1 token ≈ 4 characters
  private readonly CHARS_PER_TOKEN = 4;

  estimateTokens(text: string): number {
    // More accurate estimation considering:
    // - Whitespace and punctuation
    // - Code syntax overhead
    // - Special characters

    const baseTokens = text.length / this.CHARS_PER_TOKEN;
    const codeMultiplier = this.getCodeMultiplier(text);

    return Math.ceil(baseTokens * codeMultiplier);
  }

  private getCodeMultiplier(text: string): number {
    const indicators = {
      hasCode: /```[\s\S]*```/.test(text),
      hasJSON: /\{[\s\S]*\}/.test(text),
      hasSpecialChars: /[^\x00-\x7F]/.test(text),
      hasIndentation: /^\s{2,}/m.test(text)
    };

    let multiplier = 1.0;
    if (indicators.hasCode) multiplier *= 1.2;
    if (indicators.hasJSON) multiplier *= 1.15;
    if (indicators.hasSpecialChars) multiplier *= 1.1;
    if (indicators.hasIndentation) multiplier *= 1.05;

    return multiplier;
  }
}

Context Window Optimization

Layered Context Strategy

// Intelligent context layering
class ContextLayerManager {
  private layers = {
    immediate: 2000,    // Current file + direct deps
    relevant: 5000,     // Related files in module
    extended: 10000,    // Broader codebase context
    reference: 20000    // Documentation and examples
  };

  async buildOptimalContext(task: Task): Promise<Context> {
    const context = new Context();

    // Start with immediate context
    context.add(await this.getImmediateContext(task));

    // Add layers based on task complexity
    if (task.complexity > 5) {
      context.add(await this.getRelevantContext(task));
    }

    if (task.requiresArchitecturalKnowledge) {
      context.add(await this.getExtendedContext(task));
    }

    // Always leave room for response
    const responseBuffer = this.estimateResponseSize(task);
    return this.pruneContext(context, responseBuffer);
  }

  private pruneContext(context: Context, responseBuffer: number): Context {
    const maxTokens = this.getMaxTokensForModel() - responseBuffer;

    if (context.tokenCount <= maxTokens) {
      return context;
    }

    // Intelligent pruning
    return this.intelligentPrune(context, maxTokens);
  }
}

Context Compression Techniques

Code Minification

// Remove unnecessary tokens from code context
class CodeMinifier {
  minifyForContext(code: string): string {
    // Remove comments (except JSDoc)
    code = code.replace(/\/\/(?!\/)[^\n]*/g, '');
    code = code.replace(/\/\*(?![\*!])[^*]*\*+(?:[^/*][^*]*\*+)*\//g, '');

    // Remove extra whitespace
    code = code.replace(/\s+/g, ' ');
    code = code.replace(/\s*([{}();,])\s*/g, '$1');

    // Remove console.logs in context
    code = code.replace(/console\.(log|warn|error)\([^)]*\);?/g, '');

    return code.trim();
  }

  preserveStructure(code: string): string {
    // Keep structure but minimize tokens
    return code
      .split('\n')
      .map(line => {
        // Preserve indentation structure
        const indent = line.match(/^\s*/)[0];
        const content = line.trim();

        // Skip empty lines
        if (!content) return '';

        // Minimize but keep readable
        return indent + content;
      })
      .filter(Boolean)
      .join('\n');
  }
}

Semantic Compression

// Compress by extracting semantic meaning
class SemanticCompressor {
  async compressContext(files: File[]): Promise<CompressedContext> {
    const signatures = [];
    const relationships = [];

    for (const file of files) {
      // Extract only signatures and types
      const ast = await this.parseFile(file);

      signatures.push({
        file: file.path,
        exports: this.extractExports(ast),
        imports: this.extractImports(ast),
        types: this.extractTypes(ast)
      });

      relationships.push(this.extractRelationships(ast));
    }

    return {
      signatures,
      relationships,
      summary: this.generateSummary(signatures, relationships)
    };
  }
}

Reference Compression

// Use references instead of full content
class ReferenceCompressor {
  compressWithReferences(context: Context): CompressedContext {
    const seen = new Map<string, string>();
    const compressed = [];

    for (const item of context.items) {
      const hash = this.hashContent(item.content);

      if (seen.has(hash)) {
        // Replace with reference
        compressed.push({
          type: 'reference',
          ref: seen.get(hash),
          path: item.path
        });
      } else {
        // First occurrence
        const id = this.generateId();
        seen.set(hash, id);

        compressed.push({
          type: 'definition',
          id,
          content: item.content,
          path: item.path
        });
      }
    }

    return { compressed, savings: this.calculateSavings(context, compressed) };
  }
}

Model Selection Strategy

Token-Aware Model Selection

// Choose optimal model based on token requirements
class ModelSelector {
  private models = {
    'claude-4-haiku': {
      contextWindow: 8192,
      costPer1kInput: 0.0003,
      costPer1kOutput: 0.0015,
      speed: 'fast',
      quality: 'good'
    },
    'claude-4-sonnet': {
      contextWindow: 200000,
      costPer1kInput: 0.003,
      costPer1kOutput: 0.015,
      speed: 'medium',
      quality: 'excellent'
    },
    'claude-4-opus': {
      contextWindow: 200000,
      costPer1kInput: 0.015,
      costPer1kOutput: 0.075,
      speed: 'slow',
      quality: 'best'
    },
    'gemini-2.5-pro': {
      contextWindow: 1000000,
      costPer1kInput: 0.002,
      costPer1kOutput: 0.008,
      speed: 'fast',
      quality: 'excellent'
    }
  };

  selectOptimalModel(context: Context, task: Task): ModelChoice {
    const factors = {
      contextSize: context.tokenCount,
      taskComplexity: task.complexity,
      qualityRequired: task.qualityRequirement,
      budgetConstraint: task.maxCost,
      speedRequirement: task.urgency
    };

    // Filter by context window
    const compatible = Object.entries(this.models)
      .filter(([_, model]) => model.contextWindow >= factors.contextSize);

    // Score each model
    const scored = compatible.map(([name, model]) => ({
      name,
      model,
      score: this.scoreModel(model, factors)
    }));

    // Return best match
    return scored.sort((a, b) => b.score - a.score)[0];
  }
}

Cost Optimization Matrix

Task Type	Recommended Model	Context Strategy	Expected Tokens
Simple Edits	Haiku	Minimal (2-3K)	500-1K output
Feature Dev	Sonnet	Moderate (10-20K)	2-5K output
Refactoring	Sonnet/Opus	Extended (20-50K)	5-10K output
Architecture	Opus/Gemini	Full (50K+)	10K+ output
Bug Analysis	Gemini	Targeted (30K)	3-5K output

Token Usage Monitoring

Real-Time Token Tracking

// Monitor token usage across sessions
class TokenMonitor {
  private usage = new Map<string, TokenUsage>();

  async trackRequest(request: AIRequest, response: AIResponse) {
    const usage: TokenUsage = {
      timestamp: new Date(),
      model: request.model,
      inputTokens: await this.countTokens(request.prompt),
      outputTokens: await this.countTokens(response.content),
      cost: this.calculateCost(request.model, inputTokens, outputTokens),
      task: request.metadata.task,
      user: request.metadata.user
    };

    this.recordUsage(usage);
    this.checkAlerts(usage);
  }

  async generateReport(period: Period): Promise<UsageReport> {
    const usage = this.getUsageForPeriod(period);

    return {
      totalTokens: usage.reduce((sum, u) => sum + u.inputTokens + u.outputTokens, 0),
      totalCost: usage.reduce((sum, u) => sum + u.cost, 0),
      byModel: this.groupByModel(usage),
      byTask: this.groupByTask(usage),
      byUser: this.groupByUser(usage),
      trends: this.analyzeTrends(usage),
      recommendations: this.generateRecommendations(usage)
    };
  }
}

Usage Analytics Dashboard

// Analytics for token optimization
class TokenAnalytics {
  analyzePatterns(usage: TokenUsage[]): AnalysisResult {
    return {
      inefficientPatterns: this.findInefficiencies(usage),
      optimizationOpportunities: this.findOptimizations(usage),
      costSavingPotential: this.calculateSavings(usage),
      userBehaviors: this.analyzeUserPatterns(usage)
    };
  }

  private findInefficiencies(usage: TokenUsage[]): Inefficiency[] {
    const inefficiencies = [];

    // Large context for simple tasks
    const oversizedContexts = usage.filter(u =>
      u.task.complexity < 3 && u.inputTokens > 10000
    );

    // Repeated similar requests
    const duplicates = this.findDuplicateRequests(usage);

    // Inefficient model selection
    const suboptimalModels = usage.filter(u =>
      this.isSuboptimalModel(u)
    );

    return [...oversizedContexts, ...duplicates, ...suboptimalModels];
  }
}

Caching Strategies

Intelligent Response Caching

// Cache AI responses to reduce token usage
class ResponseCache {
  private cache = new LRUCache<string, CachedResponse>({
    max: 1000,
    ttl: 1000 * 60 * 60 * 24, // 24 hours
    updateAgeOnGet: true
  });

  async getCachedOrGenerate(
    prompt: string,
    generator: () => Promise<Response>
  ): Promise<Response> {
    const key = this.generateCacheKey(prompt);
    const cached = this.cache.get(key);

    if (cached && this.isValid(cached)) {
      // Check if context has changed significantly
      if (await this.contextStillValid(cached)) {
        this.recordCacheHit(key);
        return cached.response;
      }
    }

    // Generate new response
    const response = await generator();

    // Cache if appropriate
    if (this.shouldCache(prompt, response)) {
      this.cache.set(key, {
        response,
        prompt,
        timestamp: Date.now(),
        contextHash: await this.hashContext()
      });
    }

    return response;
  }
}

Partial Response Reuse

// Reuse parts of previous responses
class PartialResponseCache {
  async findReusableSegments(newPrompt: string): Promise<ReusableSegment[]> {
    const segments = [];
    const similar = await this.findSimilarPrompts(newPrompt);

    for (const cached of similar) {
      const reusable = this.extractReusableSegments(
        cached.prompt,
        cached.response,
        newPrompt
      );

      segments.push(...reusable);
    }

    return this.rankByRelevance(segments, newPrompt);
  }

  buildPromptWithCache(
    basePrompt: string,
    segments: ReusableSegment[]
  ): EnhancedPrompt {
    return {
      prompt: basePrompt,
      context: segments.map(s => ({
        type: 'cached_response',
        content: s.content,
        relevance: s.relevance
      })),
      expectedSavings: this.estimateTokenSavings(segments)
    };
  }
}

Budget Management

Token Budget Allocation

// Manage token budgets across teams and projects
class TokenBudgetManager {
  private budgets = new Map<string, Budget>();

  async allocateBudget(period: Period): Promise<AllocationPlan> {
    const totalBudget = this.getTotalBudget(period);
    const teams = await this.getTeams();
    const historicalUsage = await this.getHistoricalUsage();

    // Smart allocation based on multiple factors
    const allocations = teams.map(team => ({
      team,
      allocation: this.calculateAllocation(team, {
        historicalUsage: historicalUsage[team.id],
        teamSize: team.size,
        projectPriority: team.priority,
        efficiency: this.calculateEfficiency(team)
      })
    }));

    return {
      period,
      totalBudget,
      allocations,
      rules: this.generateBudgetRules(allocations)
    };
  }

  enforcebudget(request: TokenRequest): Promise<boolean> {
    const budget = this.budgets.get(request.teamId);

    if (!budget) return false;

    const projected = budget.used + request.estimatedTokens;

    if (projected > budget.limit) {
      // Check if request qualifies for exception
      if (this.qualifiesForException(request)) {
        return this.requestBudgetException(request);
      }

      return false;
    }

    return true;
  }
}

Cost Optimization Strategies

Prompt Templates

Reuse optimized prompts for common tasks

Batch Processing

Combine multiple small requests into one

Progressive Enhancement

Start simple, add context only if needed

Off-Peak Usage

Schedule non-urgent tasks for lower rates

Advanced Optimization Techniques

Dynamic Context Pruning

// Intelligently prune context based on relevance
class DynamicContextPruner {
  async pruneContext(
    context: Context,
    targetTokens: number
  ): Promise<PrunedContext> {
    // Score each context item
    const scored = await Promise.all(
      context.items.map(async item => ({
        item,
        score: await this.scoreRelevance(item, context.task)
      }))
    );

    // Sort by relevance
    scored.sort((a, b) => b.score - a.score);

    // Select items within token budget
    const selected = [];
    let tokenCount = 0;

    for (const { item, score } of scored) {
      const itemTokens = await this.countTokens(item);

      if (tokenCount + itemTokens <= targetTokens) {
        selected.push(item);
        tokenCount += itemTokens;
      } else if (score > 0.8) {
        // Try to compress high-value items
        const compressed = await this.compress(item);
        if (tokenCount + compressed.tokens <= targetTokens) {
          selected.push(compressed.item);
          tokenCount += compressed.tokens;
        }
      }
    }

    return {
      items: selected,
      totalTokens: tokenCount,
      prunedItems: scored.length - selected.length
    };
  }
}

Token Recycling

// Reuse tokens from previous interactions
class TokenRecycler {
  async recycleTokens(conversation: Conversation): Promise<RecycledContext> {
    const messages = conversation.messages;
    const recycled = [];

    // Identify reusable segments
    for (let i = 0; i < messages.length - 1; i++) {
      const message = messages[i];

      if (this.isReusable(message)) {
        recycled.push({
          content: this.extractReusableContent(message),
          summary: await this.summarize(message),
          tokens: await this.countTokens(message)
        });
      }
    }

    // Build compressed context
    return {
      summary: this.buildSummary(recycled),
      keyPoints: this.extractKeyPoints(recycled),
      savedTokens: this.calculateSavings(messages, recycled)
    };
  }
}

Team Token Strategies

Shared Token Pool

// Manage shared token pools for teams
class SharedTokenPool {
  async drawFromPool(request: PoolRequest): Promise<TokenAllocation> {
    const pool = await this.getPool(request.teamId);

    // Check availability
    if (pool.available < request.tokens) {
      // Try to borrow from other pools
      const borrowed = await this.borrowTokens(
        request.teamId,
        request.tokens - pool.available
      );

      if (!borrowed.success) {
        throw new InsufficientTokensError();
      }
    }

    // Allocate tokens
    const allocation = {
      tokens: request.tokens,
      user: request.userId,
      purpose: request.purpose,
      timestamp: new Date(),
      expiresAt: this.calculateExpiry(request)
    };

    await this.recordAllocation(allocation);

    return allocation;
  }
}

Best Practices

1. Monitor Continuously

   • Track token usage in real-time
   • Set up alerts for unusual patterns
   • Review usage reports weekly

2. Optimize Proactively

   • Compress context before sending
   • Cache frequent responses
   • Use appropriate models for each task

3. Educate Team

   • Share token optimization techniques
   • Create guidelines for efficient prompts
   • Reward efficient token usage

4. Iterate and Improve

   • Analyze usage patterns
   • Refine optimization strategies
   • Update templates and caches

Token Efficiency Checklist

• Implement token counting before requests
• Set up response caching
• Configure model selection logic
• Create context compression utilities
• Establish token budgets
• Monitor usage patterns
• Optimize prompt templates
• Train team on best practices

Tip

Pro Tip: The best token optimization is often preventing unnecessary requests entirely. Consider if the task truly needs AI assistance before making the request.

ROI Measurement

Metric	Formula	Target
Token Efficiency	Output Value / Tokens Used	>0.8
Cache Hit Rate	Cached Responses / Total Requests	>30%
Cost per Feature	Token Cost / Features Delivered	Decreasing
Context Efficiency	Relevant Tokens / Total Context	>70%

Next Steps

1. Audit Current Usage - Analyze your team’s token patterns
2. Implement Monitoring - Set up tracking and alerts
3. Optimize Workflows - Apply compression and caching
4. Measure Impact - Track improvements over time

Remember: Effective token management isn’t about using fewer tokens—it’s about extracting maximum value from every token used. Focus on ROI, not just cost reduction.